Why Does the Michigan House Want Schools to Waste Money?

Parents, children, teachers and taxpayers all expect to get the best education possible for the dollars spent by the public schools. If they knew what quietly slipped through the Michigan House of Representatives recently, they would be asking why many legislators do not feel the same way.

Countless studies have shown that more than money, schools need better money management. When schools spend more than is necessary to keep the buildings clean, or to feed and transport the kids, they have less to spend for classroom instruction. A little more than three years ago, the legislature gave school boards wider latitude for improving quality and saving money by making it easier for them to put school support services up for competitive bid. As part of Public Act 112 of 1994, the legislature took the privatization of these services off the list of mandatory topics for the bargaining table.

That upset certain peoplemost notably leaders of the Michigan Education Association (MEA), the states largest union of janitors, cooks, bus drivers and teachers. As school districts all across the state began to exercise their new rights under Public Act 112, privatization became a popular toolfor both improving service and cutting costs. But improving service and cutting costs arent what the MEA is all about so this past June, it prevailed on a majority of the Michigan House to undo the 1994 law. The House of Representatives passed H.B. 4775, legislation that would place Michigan school boards, once again, in the position of having to negotiate the privatization of noninstructional services with the union.

In addition to forcing noninstructional outsourcing issues back to the bargaining table, the House bill would create a system of binding arbitration for all nonteaching school employees. Binding arbitration is normally reserved for critical areas of public sector work to protect public safety, ensuring that police and firefighters do not strike. H.B. 4775 would permit bus drivers, school janitors, cafeteria workers, and hall monitors to use binding arbitration whenever a dispute arose in the school, effectively forcing school boards to halt any efforts to privatize in-house services.

The crux of this issue is whether a public school employer should have the flexibility to outsource certain noninstructional jobs. If a school district finds a way to save money and improve serviceswhether that is in the lunchroom, transportation or maintenanceshould a teachers union or arbitrator be able to block the proposed change?

The MEA, it should be noted, does not oppose every instance of contracting out. With few exceptions, it just doesnt like it when school boards do it. As the Mackinac Center for Public Policy revealed in 1994, the MEA has frequently engaged in the practice itselfcontracting out for its cafeteria, janitorial, security and mailing functions at its own East Lansing headquarters, and often with nonunion firms!

Kevin Harty, of the Lansing law firm Thrun, Maatsch & Nordberg, P.C., which represents over 400 Michigans school boards, has pointed out that the contracting provision of PA 112 has proven to be very important. It has freed school boards to seek contracts with private vendors without being badgered about it during negotiations. Enacting binding arbitration for noninstructional employees, Harty states, would be "absolute suicide." It would cripple the ability of elected boards to manage their districts fiscal affairs and divert their attention from the classroom.

Anita Gugala Petrosky, author of 1994 PA 112: Shifting the Balance of Power In Public School Employee Collective Bargaining, notes that school districts need to reform their fiscal policies because of Proposal A (the shift in public school financing from local property taxes to other mechanisms) and changes to the school code. Privatization offers one possible avenue for saving valuable school funds. Harty emphasizes that considering privatization is a healthy process even if the final decision is to not do it because "it is enough to have that option available to make schools more efficient."

According to the most recent National Center for Education Statistics survey, Michigans noninstructional services account for 18 percent of all public school expenditures, or more than $2 billion annually. Shaving just 15 percent off a $2 billion bill through competitive contracting would save $300 million annuallythats $300 million in scarce resources that could be put to use in the classroom. Instances where privatization has saved 15 percent or more in costs are commonplace.

The Senate has yet to render a judgment on H.B. 4775. If it keeps its collective mind on what schools are really for"education"it will realize that both houses did the right thing in 1994 and allow H.B. 4775 to die as quietly as it was born.